“Bob Diamond has no option; he has to go,” I wrote at the end of last week after the Libor fixing scandal claimed its first victim: Barclays. I took no pleasure in saying so, however, because Diamond is one of the titans of the global investment banking industry; a pioneer, an innovator, a hugely energetic builder of businesses.

IFR Editor-at-large Keith Mullin

On a more personal note, he’s also an affable and charismatic individual who’s been gracious with his time with me over the 10-plus years I’ve known him and who’s taught me a lot about the industry on which he’s expended so much personal passion.

His departure from Barclays is unlikely to be the end of his involvement with banking. And that’s a good thing. To have the industry lose one of its greatest talents would be a tragedy. So why, then, did I suggest he should go? Not because I felt he had any personal involvement in or knowledge of any rate fixing (of course I have no idea); more because I felt the CEO had a responsibility to accept symbolic culpability as the outrage expressed over it grew, as the political backlash built, and ahead of a potentially messy investigation into interest-rate swap mis-selling.

Because of his evangelical dedication to the cause and his sheer drive, over the next few years, he transformed what had become known as Barclays Capital into probably the world’s fastest growing investment bank in the world in revenue, profit and market share.

I know the story’s been told over and over, but it’s worth remembering what Diamond achieved at Barclays in the 16 years he was there. Following very senior stints at CSFB and Morgan Stanley, Diamond joined the-then BZW in 1997.

At the time, BZW represented the rump of Barclays Bank’s failed investment banking ambitions. The bank had sold its equities and advisory business and as I wrote when Barclays won IFR’s 2004 Bank of the Year: “when Diamond joined the firm … he came to an operation that had trashed its issuer and institutional client relationships, and blown up its advisory network.”

Making a virtue out of necessity, Diamond set about building a debt-only investment bank. Because of his evangelical dedication to the cause and his sheer drive, over the next few years, he transformed what had become known as Barclays Capital into probably the world’s fastest growing investment bank in the world in revenue, profit and market share.

Back on the map

More to the point – and UK politicians take note – in doing so he almost single-handedly put the UK back on the investment banking map as his integrated debt advisory, risk management solutions and debt financing house moved up the ranks and the model found traction with clients and counterparties.

The transition to full-service investment bank with equities and M&A would only come when Barclays acquired Lehman Brothers’ US business in 2009. For the first time, that gave Diamond a huge opportunity to go head-to-head on a like-for-like basis with the industry behemoths.

Taking the best from the Lehman side and melding it with the best from the Barclays side, Diamond added talent across the franchise so that by the end of 2011, he could justifiably lay claim to having masterminded the creation of one of the leading go-to investment banks in the world – and IFR’s 2011 Bank of the Year.

But was Diamond’s elevation to the group CEO job a step too far for someone who’d spent his entire career in and around dealing rooms and in wholesale finance? This is the key question. Back in March 2011, I wrote a blog entitled: “Follow my leader in investment banking”.

About Diamond, I wrote: “One key issue is whether people with a background in trading or investment banking are cut out to run brand-name broad banking franchises that span retail, consumer and small business banking as well as investment banking and global markets. Banks are part and parcel of the social fabric and framework of the communities they serve, and that brings with it a range of responsibilities and accountabilities that are unknown in investment banking or trading.

“I’m not sure if it’s a good fit. It’s early days for Bob Diamond. An extremely charismatic individual, Diamond by the same token doesn’t suffer fools gladly and is not a man of unlimited patience. His career of over 30 years in the business has been spent in the rarefied confines of wholesale/institutional trading … a cut-throat dog-eat-dog world that has defined his world view. It didn’t take long for MPs to puncture his cheerful demeanour with their relentless baiting at the Treasury Select Committee hearing in January [2011]. He inhabits a different world now and it’s by no means certain if he’ll put up with it or if it will put up with him.”

I’m not sure if Diamond’s departure was driven by former or the latter but the latest events have certainly been the outcome of two worlds colliding. Maybe we’ll get a better sense of which way round it was that when he testifies before the Treasury Select Committee.